Questionmy hubby was involved in an auto accident..the other guy was at fault. the other drivers ins. comp.
(Direct) has totaled out our vehicle 1994 nissan pathfinder and have offered around $3,700 less various fees which leaves the offering us $3,318.
this is our first dealing with an insurance comp. so my ? is can they deduct monies for various fees and if so what kind of fees can they deduct for? what should we do?
Answerxxxxxxxxxxxxxxxxx
Dear Melissa Thompson,
I am not sure what "fees" are being deducted, so if you could ask for them in writing and an explanation of why they are being deducted, that would be helpful to answer your question. Just send in that information and I can respond to it.
One "fee" that I have seen some insurance companies try to charge is a fee for getting the car ready for resale. This is INANE and must be rejected outright. The company that decides to "total" your car has to pay you the actual cash value of the car, as it stood just before the accident. Period--no deducting a "fee" to get the car ready for resale.
But let me know the nature of these "fees", and I can better respond to you.
I can think of one fee that the insurance company needs to ADD to the value of your car, and that is the unexpired license tab fees. If you paid $100 to license your car three months ago, then you have nine months of unexpired license tabs that they have to pay for. Thus, you would add $75 to the value of your car.
NOW, on to three new topics, just in case you want a little extra background on your rights.
FIRST is whether or not the car should even be totaled in the first place; SECOND is how do you get value for a new major replacement or upgrade you may have done to the car; and THIRD, is just Dr. Settlement's general guidance on how to approach responding to an offer from the insurance adjuster.
So, let's get started with the decision to "total" the car.
Have you considererd whether or not YOU want your car "totaled" or not? Do you know whether or not the $3,318 will buy you anywhere near the same quality of transportaion? Will you have to incur a loan payment to get adequate transportation? What if you put a lot of money into repairs in the past 18 months? You will not get that money back in cash value of the car, but the repairs may have made your vehicle desireable to continue operating.
Do you see where I am heading here? You may have the choice to just take the cash value of the car and have repairs made at less expense than on the estimate. Here is how it works.
For example, let's say that a normal '94 Pathfinder had a fair market value of $3,700. But your car, because of the retitled salvage, had a value of only $3,500.
Let's say that the cost of repairs, using Original Equipment parts (OEM) is $3,500.
In this case, the insurer can "total" your car and pay you the FMV (with certain adjustments). They take your car and sell it for cash, without having repaired it.
BUT, maybe you were happy with the performance of your car, and/or maybe you had put a lot of money into maintenance—then you may wish to explore ways to keep the car. Ask what the body shop would charge to repair your vehicle with USED non-OEM parts.
You can negotiate to leave cosmetic stuff showing and just repair the structural damage with USED PARTS. I would not be surprised to see a substantial amount come off their repair bill in that case. If you have a car that was running fine, why not keep it, even if you have to drive around with some dents showing?
Thus, you negotiate the value of the car and "buy" the vehicle back from the insurance company for a small amount, and you use the insurance payout to repair your existing vehicle.
Check out what your insurance payment of $3,500 will buy you on the market. And if you feel you cannot buy a better ride with the $3,500 you are going to get, then consider making the repairs with USED AND NON-OEM PARTS. If you do this, the value of the repairs could drop by as much as $1,000, down to $2,500. In this case, you would retain your ride. Does that make sense?
You can read how this strategy would work on the Internet at my website. Direct your browser to www.SettlementCentral.Com, where I have complete articles on your rights after a car accident. Here is the link for property damage: http://www.settlementcentral.com/page0007.htm
Just scroll down near the bottom and click on the link "your vehicle is totaled". There you can read a strategy that will sometimes work when a person wants to keep their car and repair it with USED NON-OEM parts. By the way, that page also lets you know that YOU CAN CHOOSE your own body shop to do the work, so you have the power to invest your cash payout from the insurance company any way you wish.
SECOND, have you made major item replacements, above and beyond normal maintence? For example, a rebuilt transmission or the like will add value to a used car. How about new tires or a new stereo system? The issue is: how much (if any) did they increase the FMV or actual cash value of the car. See the above link and scroll to the bottom for more information on that topic.
THIRD, I sense you have not done your own homework to go back against their first offer. Hey, what they say was not written in stone was it? Of course not: so you can go back to them with your own research and make your own counter-offer.
You can use information from local papers, advertising flyers, car dealerships, and the Internet. My favorite sites for valuation are www.Edmunds.com, www.autotrader.com, http://www.carsdirect.com/home and http://www.livedeal.com/index.jsp
They want to know your zip code, and then they ask for a range in miles to search. Don't limit yourself to your city: it is reasonable that someone could go up to 300 miles to pick up a used car. That way you will get a lot more information.
Do your own research to counter what they provided to you on the fair market value. BE FIRM that what you get is fair market value (FMV), NOT WHAT A DEALER would give you on trade-in.
Communicate in writing, showing your own print-outs. It is fine to meet with him or her, but have your ammunition in writing to give to the adjuster.
Let him know that you are FIRM IN YOUR RESOLVE to get what you are demanding (NOT "asking", since that invites a counter-offer, but instead "demanding" as fair and reasonable compensation) by asking him what the options are to resolve the matter fairly should he not agree to a reasonable replacement value. In other words, let him know that you will go through with an arbitration or a small claims action if need be.
Remember these tips, do your homework, print out your evidence, show resolve to get your fair settlement, and you will DO JUST FINE.
Please let me know if there is anything else you wish for me to address. AND please take the time to leave me feedback so I can know that I have been of some assistance to you.
Best Wishes,
Dr. Settlement, J.D.
www.SettlementCentral.Com
